Human embryonic stem cells (hESC) and induced pluripotent stem cells (iPSC) serve an unlimited source of cells capable of differentiating retinal pigment epithelial cells. These cells may be used in in vitro drug testing and in cell transplantation therapies. Small population of pluripotent hESCs and iPSCs spontaneously differentiate to RPE cells. At present most differentiation methods are based on this rather inefficient method. Maturation of RPE cells from pluripotent stem cells occurs via multiple developmental phases. In those phases cells express genes and proteins that are characteristic to neuroectodermal, optic vesicle, optic cup and in the end mature RPE cells. Differentiation and maturation process of RPEs is slow, taking several weeks. However, attempts to improve the yield and the rate of maturation with biological and chemical supplements are ongoing in the laboratories around the world. The differentiation potency and maturation status is dependent on the cell line and the culture environment, furthermore hESC and iPSC derived RPE cells are also capable to trans-differentiatiate. In addition to the basic cell and molecular biological characterizations it is vitally important to assess the differentiation and maturation status of acquired cells with functional tests. In this lecture methods to derive RPE cells from hESC and iPSC as well as functional test to assess functionality of acquired cells will be addressed.